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U.S. issues new Cuban travel, business rules

New Cuba regulations

The U.S. is tightening restrictions on travel to Cuba and business with the country, due to take effect Thursday.

The Treasury, Commerce, and State Departments say the rules are aimed at steering business away from the Cuban military, intelligence, and security services and to the Cuban private sector. A senior administration official says the new restrictions "have nothing to do" with "acoustic incidents" that have harmed at least 24 Americans in Havana over the past year.  

The U.S. will prohibit Americans from doing business with dozens of Cuban government-run hotels, shops, tour groups and other entities identified by the State Department.

"I think overall it's certainly a step backwards," said Collin Laverty, president of Cuba Educational Travel. "It's bad for U.S. companies. It's bad for U.S. travelers."

The rules will make it harder for Americans to travel independently to Cuba, by requiring them to use authorized "people-to-people" tour companies instead.

Cuba trade and travel industry experts worry the rules will scare off businesses and tourists daunted by complex regulations.

"It sends a message that this is more complicated and more scary," Laverty said.

Tourism to Cuba increased after former President Obama restored diplomatic ties with the country and eased travel restrictions in 2015.

The Brookings Institution estimated "the number of foreign visitors could rise from 3.5 million in 2015 to over 10 million in 2030."

But the new restrictions could further reduce the number of U.S. travelers to Cuba—a travel warning issued by the State Department Sep. 29, following the attacks on U.S. embassy workers, 

"The greatest increase during the last two years has been with individuals traveling to Cuba," said John Kavulich, president of the New York-based U.S.-Cuba Trade and Economic Council. "The entities that are going to suffer the most, with respect to the change, will be U.S. Airlines. The entities that will gain the most will be cruise lines, because they are experts are dealing with groups and moving groups. And they have included Cuba on itineraries that aren't just Cuba-specific, so they're able to navigate a lot of these changes."